Indian central bank chief stressed the need for trade integration among South Asian countries for a sustainable economic growth in the region, but expressed his reservation about financial integration. ‘The trade integration is undeniably beneficial, but financial integration has both, benefits and risks, at our stage of development,’ Reserve Bank of India governor YV Reddy told a business audience in Dhaka on May 17. Elaborating, he said capital can easily reverse its direction, which becomes difficult for monetary watchdogs to identify its rules of origin.

Chittagong Port Authority (CPA) on May 16 introduced a new single-point system to replace the old fashioned stevedoring system for cargo handling at Chittagong Port. The new system, also known as berth operator system, came into force with the delivery of containers from MV Banga Barta and MV Hasna at the port. The decision to introduce the single-point operating system was taken at a high-level meeting at Chittagong Port on May 7.

The country’s apex trade body on May 16 requested the government to impose specific duties on edible oil, powdered milk, baby foods, basic metal and raw materials in the next budget to keep prices of the essential products and industrial raw materials stable. The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) also recommended specific duties on other essential products on which ad valorem (in proportion to the value of something) duty have been imposed.

Members of eight-nation Asian Clearing Union (ACU) mull introducing multi-currency settlement options in the organisation’s transactions. The ACU countries now settle entire payments of external trade only through US dollar. Following recommendations of some members, the 36th board meeting of ACU, which began in Dhaka on May 15, formed a technical committee headed by Sri Lankan central bank chief to assess the possibility to introduce the multi-currency options.

The interim government is on the look out for new windows for manpower export as about 200,000 Bangladeshi workers got jobs abroad over the past four months, officials said on May 15. Officials of the overseas employment ministry said the figure is almost twice the number of people sent abroad in the same period of the previous year. Some 0.197 million (1.97 lakh) skilled, semi-skilled and unskilled workers were sent abroad in January-April this year. The figure was 96,411 over the same period in 2006, according to the officials.

A growing global market of information technology–nabled services, including business process outsourcing, offers opportunities worth billions of dollars for Bangladesh if it can build service capacity and catch up with competitors, says the Asian Development Bank. The global market for such sophisticated services is estimated at $1,000 billion in 2007 with an annual growth rate of 30 per cent as the companies in the developed countries are looking for partners in developing countries for cutting costs.

The Asian Development Bank (ADB) on May 15 advised the central bank to adopt a cautious monetary policy and control budgetary borrowing with a more flexible exchange rates management to mitigate inflationary pressures. The ADB in its Quarterly Economic Update, released on May 15, said point-to-point inflation rose by 6 percentage point between July 2006 and March 2007. The rise was due to growing food and non-food inflation, high monetary and private sector credit growth, government efforts to stem rising price of essentials, high fuel prices, and considerable increase in exports and remittances.

Bangladesh can become a middle-income country by 2016 if it raises its GDP growth a little more to a sustained 7.5 percent a year, the World Bank (WB) country director said on May 15. At the current pace of growth, Bangladesh will become a middle-income country by 2023, Xian Zhu further said. He was speaking at the monthly luncheon meeting of American Chamber of Commerce in Bangladesh (AmCham) in Dhaka.

India could become the second largest economy in the world if we followed the right path for industrial growth, Union Finance Minister P Chidambaram said. He said no country could abolish poverty solely depending on agriculture but needed to achieve industrial growth as well. The service sector presented much better opportunity than agriculture, Chidambaram added.

Bangladesh Garments Manufacturers and Exporter Association (BGMEA) has demanded extension of the time for bond facilities and release of cash incentives for the apparel sector in the upcoming budget. The BGMEA demand was raised on May 14 when a delegation led by its president Anwar-ul-Alam Chwodhury Parvez called on Finance Adviser Mirza Azizul Islam at his office and submitted a 13-point demand to him.

India must reconsider allowing foreign direct investment (FDI) from Bangladesh on case-by-case basis and examine the possibility of more imports from that country, Minister of State for Commerce Jairam Ramesh was quoted on May 14 as saying. FDI from countries like Pakistan and Bangladesh should be permitted on case-by-case basis, Ramesh said. “Our mindset towards trading partners needs a change. We must see what we can buy even while we explore possibilities of what we can sell,” the minister was quoted by leading financial daily “The Economic Times” as saying. The change in India’s mindset, he said, was required to realise the full potential of regional trade and economic integration with the neighbouring countries.

Afghanistan is interested to recruit manpower from Bangladesh to rebuild the war-ravaged country. The new Afghan Ambassador in Dhaka Ahmed Karim Nawabi expressed the willingness during a courtesy call on Chief Adviser Dr Fakhruddin Ahmed at his office on May 14 morning. The CA said Bangladesh would certainly send manpower to Afghanistan, which will be win-win deal for both the countries. He said Bangladesh wants to help Afghanistan achieve socio-economic growth and will be happy to help the country. He also mentioned performance of a Bangladeshi NGO, BRAC, in Afghanistan. BRAC is working in various areas including microfinance.

The caretaker government announced on May 14 a three-year import policy, which has been designed to protect domestic industries and make exports competitive. The policy has restricted import of all but the ones under 25 categories. The import items restricted under the new policy include pork, any print or electronic publication and good that may hurt people’s religious sentiment, any obscene or horror publication including one made on compact disk, tape and film, waste and radioactive materials, certain reconditioned equipment, substandard or stock-lot commodities, all kinds of egg, and any map which does not delineate Bangladesh’s geographical territory properly.

The country’s export earnings grew 20 per cent to cross $9 billion in nine months to March on the back of strong performance of woven garment, home textile, frozen foods and footwear. Officials of the Export Promotion Bureau said, woven garments, the top of the product list, returned to a refreshing uptrend in recent months from last two years’ depressing mood. EPB’s monthly report released on May 13 showed that during July-March period of the current fiscal year, Bangladeshi exporters shipped $9036 million worth of manufactured products and commodities, up from $7517 million of the same period of the previous fiscal. The export target for July-March period was fixed at $ 8990 million. Despite growth knitwear missed the export target by 4.30 percent. Knitwear fetched $3335.22 million against the target of $3485.28 million.

Fund constraint prevented Bangladesh from joining an international consortium to link up with a trans-pacific submarine cable network as a back-up to its existing SEA-ME-WE-4 cable link. Telekom Malaysia is leading the consortium, comprising 17 major international telecommunications providers, to build the high-bandwidth optical fibre submarine cable system linking the South-East Asian region directly with the USA.

Bangladesh has urged the World Trade Organisation (WTO) to make arrangement for recruitment of the country’s manpower under the Common Product Classification (CPC) on a priority basis. A senior official of the WTO Cell of the commerce ministry said the negotiation for recruitment of manpower under some broad categories by the developed countries from the least developed countries (LDCs) has now been continuing. On completion of successful negotiation, Bangladesh could send manpower under the categories of professional, business visit, contractual service and others, the commerce ministry source told on May 13.

Finance and commerce adviser Mirza Azizul Islam asked for reconstitution of the country’s expert groups so that they can deal with the World Trade Organisation (WTO) issue more professionally. The finance and commerce adviser also directed for forming more groups if necessary, in addition to the existing five, to deal with the emerging issues to protect the country’s interest in the WTO. The decision to recast expert groups was taken at a high-powered committee meeting on May 13 with Finance and Commerce Adviser Mirza Azizul Islam in the chair.

On government’s move to list some 10 state-owned enterprises (SoEs) in phases on the Dhaka Stock Exchange, the prime bourse expects its market capitalisation to reach US$ 15 billion in the next two to three years. The listing of the SoEs, including some in the power and gas sectors, will commence in four months. Besides government entities, a big telecom company, Grameenphone, very recently announced that it is working to list the country’s leading mobile phone operator on the local stock market.

New Delhi has proposed signing a memorandum of understanding with Dhaka soon for duty-free import of eight million pieces of readymade garments from Bangladesh annually apart from India’s most recent zero-duty offer for poorer SAARC nations, including Bangladesh. Officials concerned of government agencies have, however, insisted on a few amendments to the proposed MoU to bring more clarity and specifications in implementation process of duty-free facility under tariff-rate quota of the South Asian Free Trade Area.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has taken initiative to expand market and raise annual export to US$ 15-18 billion in the next three years, reports UNB. Centre for Promotion Imports from Development Countries (CBI), a Dutch funded organisation, will assist the BGMEA to catch the European markets.